There’s no doubt that 2016 has been an eventful year, perhaps more so than any other in recent memory!
I mean, I thought last year was most interesting; however, little did I know how right I would be when I predicted in our final newsletter that, “I have a feeling 2016 will be even more interesting [than 2015].”
For a start, I reckon more money has been spent on lawyers and solicitors this year than any other. Not only must the JAA’s legal bills be huge this year, I am aware of a number of other legal matters that have been quietly ‘fought’ by various parties throughout the year costing tens of thousands of dollars.
From suppliers suing retailers, to suppliers suing suppliers and even to peripheral industry participants defending themselves against government legal action, the lawyers will most certainly have a great Christmas courteous of many in the Australian jewellery industry.
Not only has it been costly but 2016 has seen many friendships and long-term business relationships destroyed.
Indeed, if lawyers accepted contra payments (legal services for jewellery) they would not have been able to use all the diamond rings being handed over! Seriously, 2016 was a lawyer’s picnic.
We even had our own ‘lawyer dance’ this year when one silly supplier arranged for a solicitor to correspond with Jeweller over an inane and frivolous matter. It was so absurd it was like a scene from The Castle, where I waiting for the legal eagle to stand up, fumble around and announce, “It’s the vibe.”
Dealing with lawyers is par for the course for the media, but at the end of the day, this Dennis Denuto style-character was surely happy with the invoice he would have sent his poor client who, we hear, was already having trouble paying his bills!
I do hope that 2017 is a less fruitful year for solicitors representing the jewellery industry.
But back to matters more light-hearted and somewhat whimsical.
Are you aware that a well-known industry colleague owns brothels? No, well nor did he!
The rumour has been so often told that I suggested he opened one just for a laugh; however, we had a little trouble coming up with a brothel name that didn't involve the word 'ring'.
Last year I mentioned rumours about two well-known industry identities agreeing to pre-order Mustangs after a few (too many) drinks one night. Well, apparently, they were delivered and not only are they matching red but the number plates are almost matching too - being one number apart. So cute!
Though we hear some people have asked, "Why, why?" Or should that be "Y Y!"
An update on another piece of goss: after a few more calls early this year, I didn’t get any further on the scuttlebutt about a high-profile Sydney jewellery business being raided by the Australian Federal Police so we have had to put that rumour to bed.
Although I do believe it’s true that a number of underworld figures have been contacted to collect debts this year. I guess the message is that if you want to associate with the ‘stars’ then you should be sure you don’t end up ‘seeing stars’.
As always, we’ve attempted to report on serious and important issues affecting the jewellery industry and, at the same time, have a little fun along the way. We hope you enjoy our last effort for the year before closing for the break.
Without further ado, Jeweller presents 2016 Hits & Misses – and, as I have often said, if any of the stories leave you scratching your head, don’t fret it’s not lice … it’s simply the jewellery industry!
If we can’t laugh at ourselves who can we laugh at?
The Jeweller team hopes you have a great Christmas and New Year period.
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Biggest surprise
There were many surprises this year and I guess they began from the get-go when, in February, the Australian consumer watchdog commenced an inquiry into Pandora Australia’s actions against high-profile US jewellery brand Alex and Ani.
The matter started in December 2015 after Pandora advised its retail stockists that they could not distribute Alex and Ani products whilst being an authorised Pandora retailer.
Various complaints meant the matter came under the scrutiny of the ACCC early in the New Year; however, in what was perhaps another surprise, the ACCC investigation ended as quickly as it started.
Only two months after initiating the inquiry, the consumer watchdog concluded that the retail restrictions imposed by Pandora were “unlikely to have the purpose or effect of substantially lessening competition.”
That surprised many people but at the end of the day it was all over red rover!
There have been other surprising events throughout 2016; however, I think this year’s winner must go to Danish brand Endless Jewelry – even though I find myself somewhat betwixt and between on the decision.
The fascinating Endless ‘story’ came to an end – pun fully intended – when the company was placed in bankruptcy (liquidation) in November. The brand burst onto the international jewellery scene in 2013 when Jesper Nielson, the Danish entrepreneur and former Pandora director, launched the new venture after selling his European Pandora territory back to head office.
Endless was quickly billed as one of the “fastest growing jewellery brands in history” and recruited Jennifer Lopez as international brand ambassador, no small feat in its own right.
Sales purportedly went through the roof and distribution rapidly expanded into 25 territories, causing one business website in February 2015 to ask, “Can he [Nielson] turn the budding $30 million business into the next billion-dollar brand?”
However, exactly 12 months later, the high-profile Nielson suddenly left the company and then eight months on the company collapsed.
Whether the collapse was a surprise depends on whether you believe in fairytales and is the very reason why I find myself somewhat betwixt and between.
You see, there’s no doubt that Nielson is a larger than life character with plenty of chutzpah, which some people find affronting, but deep down I think most wanted Endless to succeed, even if begrudgingly, because the industry ‘needed’ – or wished for – ‘another Pandora’.
Regular readers of my commentary will know one of my mantras: nothing is ever as it first seems.
Ultimately, mathematics and accounting will always win over personality and celebrity and so it was no surprise to me, at least, that the shortcomings in the Endless business model (and fairytale) began to show – especially given that retailers could order stock on sale-or-return basis. If the product didn’t sell then it could be returned.
I, for one, hoped the brand would succeed; it makes for great copy and makes a journo’s job easier. Perhaps in many ways the biggest surprise was that the collapse didn’t happen sooner.
(For what it’s worth, it’s business as usual for the brand’s Australian and New Zealand distributor.)
Nevertheless, the bankruptcy just shows that no amount of self-confidence can bluff the debit and credit ledger and it all came tumbling down. It was, sadly, an example of Marketing 101 – never over-promise and under-deliver.
HIT OR MISS? Miss … as in missed opportunity, while retailers wait for the ‘next’ Pandora
Previous winners
2015 - Pandora in hot water
2014 - Showcase Jewellers CEO asked to stand aside
2013 - Karin Adcock shock return to the industry
2012 - Pandora’s Karin Adcock calls time
2011 - Indian jewellery company buys Zamels
What were they thinking?
What were they thinking? is one of the more popular awards, and boy have we had some dills in this category over the years!
Let’s not forget the jewellers who thought a good business practice was to steal $2.4 million from their own customers and pawn it. Then there were the ‘rocket scientists' in the Indian government who decided to tackle gold smuggling with an economic policy that unleashed a latter day Cobra Effect.
Even the 2015 winners left readers scratching their heads in disbelief ... remember when two employees of a Mumbai contractor responsible for supporting the GIA’s diamond grading databases were arrested for making unauthorised changes to more than 1,000 diamond grading reports.
What were they thinking? Had they not heard of digital fingerprints? They were IT experts after all!
Now, one would think that a case like that, which received international media coverage, might have been a deterrent to anyone else wanting to defraud the diamond industry in Mumbai – or anywhere in the world for that matter.
I mean, who would consider trying to inflate diamond reports to their advantage after that well-publicised case, right? ... Oh wait!
A Mumbai-based diamond supplier did exactly that when he attempted to improve the grade of diamonds submitted to the HRD Antwerp lab by enticing three full-time staff members to accept financial payments to tamper with the reports.
HRD Antwerp identified the fraudulent behaviour, banned the business, invalidated 156 diamond grading certificates and fired the three staff.
Seriously, what were they thinking?
HIT OR MISS? Miss
Previous winners
2015 - Tata Consultancy Services
2014 - India tackles huge increase in gold smuggling
2013 - Jewellers steal $2.4 million from own store
2012 - Zamels, making the same mistake twice!
2011 - John Abolins and Jewellery World, for making the same mistake twice!
WTF OMG
This category is always entertaining; our previous winners list contains a Lesbian love triangle and a set of thieves who thought they were breaking into a jewellery store only to discover the communal wall they smashed through actually led to a KFC store.
They’re hard acts to follow but this year’s award winner, Kay Jewelers, makes a pretty good effort and not necessarily by their own doing.
Let me explain ... the business, which describes itself as “The #1 specialty jewellery brand in the United States,” was accused of swapping a customer’s diamond for lower-valued stones while conducting work such as repairs, re-sizing and cleaning.
Unfortunately these types of claims and disputes are not new – we have all heard of them. However, what sets this case apart and made many in the industry think, “WTF, OMG!” is the ensuing social media storm that erupted, with numerous other consumers jumping in to make similar claims, some allegations dating back many years, with no proof.
A ‘Boycott Kay Jewelers’ Facebook page was established, while review and consumer websites started listing hundreds of similar complaints – albeit none of those could be substantiated. They were just unsubstantiated claims.
In case you are not aware, Kay Jewelers is a huge retail operation. With more than 1,000 stores across the US, it’s owned by Signet Jewelers, a Bermuda-based company that also owns Jared and Zales and which takes its total store count to 3,600.
Signet is listed on the New York Stock Exchange and the diamond switching allegations eventually took a toll on the company’s share price, which reportedly dropped 22 per cent at one stage after the stone-swapping claim.
It led Signity CEO Mark Light to say the diamond swapping allegations were “absurd” and he told CNBC: "We're the largest diamond retailer in the world. We got there by understanding that trust is the most important characteristic when someone is buying jewellery."
More news reports followed about the stock being shorted by traders, with one business website declaring, “The company that sells wedding rings to a lot of America is in big trouble.”
I'm not sure Kay's management handled the matter as best they could however, I, for one, seriously doubt that much of the ‘junk news’ reported on various sites was true or had any legitimacy whatsoever, especially given this, so-called, ‘post truth’ era, but it does demonstrate how simple things can get out of hand in the digital age.
The ancient Chinese had it right with their curse, “May you live in interesting times” – but of course that’s not true either because there’s no evidence to support the statement’s Chinese origin.
It’s made-up; just like most of the allegations against Kay Jewelers, I suspect.
HIT OR MISS? Miss
Previous winners
2015 - Dad's army - Hatton Garden jewellery heist
2014 - Jeweller caught trading $2 million of stolen goods
2013 - KFC jewellery store finally unlucky
2012 - Lesbian love triangle
2011 - Stupid online poll
best punch up
Before I get into this award I have an apology to make to our Kiwi readers.
Yes, it is my own mea culpa!
For some years I have chastised the New Zealand jewellery industry for being so divided; there are three Kiwi jewellery associations serving an industry no bigger than the South Australian market.
The industry disunity across the ditch has been long-standing, so much so that I have previously explained that a Kiwi jeweller once told me: "We can't even remember why we hate each other!"
While the Kiwi jewellery industry has been relatively quiet in recent times, as usual the Aussies had to try and one-up our Trans-Tasman cousins.
Our first punch up for the year was probably the continuation of the Pandora v Alex and Ani fight but that was more like a small tussle compared to what was to come.
The next punch up was JAA v Expertise Events when it was revealed in May that the two would part ways over the Sydney jewellery fair. There was some debate over who owned the jewellery fair; however, that was short lived and, indeed, having announced its new jewellery fair, the JAA quickly found itself having to change the name of the event soon afterwards because of “contractual issues”, a euphemism for “we couldn’t use the name for legal reasons”.
Not a good start!
These two protagonists went toe-to-toe for some time while the industry sat ringside wondering what the fight was over, given that the JAA had worked with, and been a financial beneficiary of, the Sydney trade fair for 25 years.
Little did we know that this punch up was simply the undercard to the main event – JAA v Nationwide Jewellers.
Actually, this more serious brouhaha really broke out from the undercard fight, spilling over to the sidelines when Nationwide and Leading Edge Jewellers chose not to support the new JAA Jewellery Tradeshow.
Both buying groups preferred to stay at Darling Harbour, stating their members and suppliers did not want to be at the Moore Park Showgrounds for a jewellery fair.
The JAA was not happy with the two buying groups’ decisions and Nationwide managing director Colin Pocklington quickly resigned from the JAA board to circumvent any conflict of interest.
The JAA went on the offensive to the extent that the board emailed Pocklington, which set in train a legal stoush that still hasn’t ended. In fact, the full ramifications are yet to be seen because Nationwide – Australia’s largest buying group by far – announced it would quit the JAA and many of its members have since stated they will not renew their membership in 2017.
It’s believed more than 100 Nationwide stores are JAA members and many have been vociferous in their criticism of the JAA. Worse, in a scene resembling a TV wrestling match, this punch up then embroiled a number of Nationwide suppliers who joined the main bout from the sidelines, saying they too would not renew their JAA membership.
The sad thing about this whole affair is that the fight is still underway – it’s probably only Round 5 of a 15 round heavyweight bout – and it’s likely to get messier next year.
On current evidence, we are headed towards our own Hatfield-McCoy feud and it clearly demonstrates how silly politics can harm an industry and, I guess, after all these years the reclusive Ken Raumati and his mates have a right to say foolishness is not exclusive to the New Zealand jewellery industry.
I’m sorry New Zealand for believing that the Australian jewellery industry was more mature than you. I was wrong!
HIT OR MISS? Miss … as in misinformed and mistimed
Previous winners
2015 - Martin Rapaport v The World
2014 - Industry called to fight diamond over-grading
2013 - New jewellery group emerges
2012 - Jewellery Association creates its own furore
2011 - New Zealand jewellery industry for a year-long punch up
say what?
Call it an occupational hazard but our colleagues at Jewellery World have dominated this award in recent years. It’s hard to go past a 16-page feature story listing Australia’s ‘Best 100 Suppliers’, which, unfortunately, contained only 70 companies.
Worse, one of the ‘top suppliers’ had gone out of business!
One of the problems with print publishing is that your mistakes last forever – there’s no changing something once it’s printed, therefore it’s arguable that Jewellery World should win again this year for publishing an article about the Sydney jewellery fair that can only be described as immensely peculiar.
So bizarre were some parts of the article that the magazine found itself facing legal proceedings in the NSW Supreme Court and quickly reached an out-of-court settlement with Expertise Events.
The whole saga was a comedy of errors that would normally be deserving of the Say What? award if not for another, more odd comedy of errors.
In typical Shakespearean tradition, enter stage right: the jeweller who was forced to sell a $34,000 diamond ring for $1,100! Say what?
The case made headlines around Australia and also generated coverage from international media, including the BBC.
It started in October when Nicholas Buttle bought his fiancée a 2.16-carat diamond ring for the advertised price of $1,123 on the website of Sydney-based Royal Diamonds.
After obtaining a receipt for the engagement ring confirming the order, he received a message later that day from Royal Diamonds that advised, “Unfortunately the diamond which you have selected is no longer available. Was there another stone you had in mind?”
The customer said he wanted a replacement diamond ring of a similar or higher grade, citing the business' own terms and conditions, which appeared on the original order and payment confirmation: “In the event that a diamond is unavailable, a diamond of similar or higher grade may be offered, or a refund of the purchase price.”
The jeweller claimed that the ring was incorrectly listed online due to a ‘typo’ and the dispute ended up in the NSW Civil and Administrative Tribunal, where the jeweller said he would have to close his business if ordered to sell a 2-carat diamond ring for $1,100.
In November, the Tribunal ruled in favour of the customer and found “an absolute contract of sale [was] made between the parties”. Royal Diamonds was ordered to provide an alternative ring valued at $34,429 or higher.
Say what?
At the time of publication, Royal Diamonds was still operating, though a spokesperson said the business had stopped taking payments online to avoid any further problems. It’s a valuable lesson for all retailers and is a little more complicated than a simple typo.
Journo’s love to say they never let truth get in the way of a good story but with a saga like this it’s like pennies from heaven.
HIT OR MISS? Hit, for the customer that is, with a $33,000 saving
Previous winners
2015 - Jewellery World for getting a story about itself wrong!
2014 - Diva jewellery stores shutting down, or maybe not!
2013 - Jewellery World Top 100 List only includes 70!
2012 - Man swallows diamonds at trade fair
2011 - Second place to Kiwis
new product
Jeweller's New Products Thursday e-newsletter showcases the latest and greatest jewellery and watch products hitting the market and in 2016 there were offerings from a wide range of suppliers, both large and small.
As would be expected, high-profile international brands like Thomas Sabo and Alex and Ani featured well; however, often smaller home-grown brands caught our readers’ attention, with three making the Top 10 this year.
Having said that, this year’s most popular new product was Ice-Watch’s striking design featured in September.
It should be remembered that the list is compiled by gauging reader interest via online views and is not indicative of anything other than reader curiosity. It is not a measure of sales but it nevertheless does show the wide range of product that captures our readers’ interest. The Top 10 products of 2016 are:
* The measurement process also takes into account the length of time each story has been published on
jewellermagazine.com and attempts to be a statistically relevant measure of reader interest.
Previous winners
2015 - Bausele Australia
2014 - TWM Co
2013 - X by Trollbeads
2012 - Pandora
2011 - Ice-Watch
weird & crazy stuff
It might be hard to imagine the conservative jewellery industry being weird and crazy but we have seen some wacky stuff over the years.
This category started when we read about the launch of a Norwegian jewellery range that decided to promote its new collection with a video featuring a beautiful woman being doused in petrol and set alight at the stake.
Then there was the aforementioned story about Ken Raumati from New Zealand, a reclusive Kiwi jewellery journalist that no one seemed to know, and if that wasn’t crazy enough, along came the Brisbane thief who stole two diamond rings by swallowing them and who was then captured by staff after a chase through a shopping centre.
So what about this year? Well, there were many contenders for Weird and Crazy Stuff; we could start with gold-plated KFC bone jewellery. Yes folks, you read it right: jewellery made from left-over KFC chicken bones.
Not weird enough for you? Well, what about Thigh Gap Jewellery?
Yep, just when you thought there was a jewelley design for every part of the human torso, now we have jewellery for a body area that doesn’t actually exist because … it’s a gap!
Don’t believe me? Well you shouldn’t, check it out for yourself.
While doing so, remember my mantra: nothing is ever as it first seems.
So you don’t believe that crazy stuff? Ok then, what about Kim Kardashian’s $10 million jewellery robbery? Many people don’t believe that either, preferring to think it was a publicity stunt.
But no, none of the above is worthy of the Weird and Crazy Stuff award, which must go to the two jewellers who confronted armed robbers in 2016.
In October, Melbourne jeweller Steven Morrow, of Imp Jewellery in Toorak, chased three balaclava-wearing attackers from his store after a smash-and-grab robbery.
Although they were armed with a gun, a machete and a baseball bat, CCTV shows Morrow refusing to cower to the robbers' demands, remonstrating with the masked men before chasing them towards the entrance – even pushing the gunman out the front door!
Morrow said “instinct took over”, telling the Herald Sun, “I was a bit surprised when they started retreating. I don’t think they were expecting me to react the way I did and it may have thrown them off as they all just looked at each other and ran out the door.”
While his actions were brave, though not recommended, Morrow was perhaps ‘outdone’ by another Melbourne jeweller who was robbed a month earlier.
The security cameras at All Diamonds Jewellers in Elsternwick captured two masked men, one armed with a sledgehammer and the other with a handgun, as they smashed through glass cabinets while three staff members were inside the store.
The store manager had left the store briefly before the robbery and returned as it was still in progress; the manager then desperately tried to get into the store to protect his staff.
However, it was what was captured on a car’s dash cam outside the store that was most amazing.
As the thieves left the store, the manager was filmed chasing them wielding a chair, which he threw at the escaping robber as he got into a waiting stolen get-away car.
HIT OR MISS? Hit … as in kapow, take that and don’t come back
Previous winners
2015 - Jewellers Association of New Zealand apology
2014 - The backyard chicken farmer and avid cat lover!
2013 - Australian thief swallows diamond ring
2012 - Ellani Collections gaining 1,000 Facebook fans
2011 - Who is Ken Raumati?
a good number
A little like an accounting ledger, our A Good Number category rotates around positive and negative numbers; some years the award goes to someone for positive news, such as our 3,000,000 good number last year, and then in other years it’s awarded for a bad set of numbers.
In 2016, we have the latter. It was July when we reported that Bensimon Diamonds, a high-profile jewellery store at Crown Casino, had gone into liquidation owing $7 million.
Soon afterward, news emerged that a diamond dealer had filed bankruptcy proceedings against Ronnie Ben-Simon, director of Bensimon Retail Group. He was ordered by the Supreme Court of Victoria to pay more than $670,000 to Australian Diamond Trading Corporation (ADTC) for failing to return a number of stones supplied to him and his businesses.
However, six months on and the story has become juicier. The numbers have increased from $7 million to $10 million, making Ronnie Ben-Simon the clear winner of this year’s A Good Number category.
According to The Age, “Ben-Simon had amassed personal and business debts estimated to be worth more than $10 million” and had “purchased $641,570 in Crown Casino gaming chips in the past two years.”
The report stated that Ben-Simon also reached limits on credit cards and overdraft facilities with five different banks to run up debts of $76,616, while another $693,868 was lost through trading derivative contracts and other equities. An investigation by bankruptcy trustees Pitcher Partners attributed some of Ben-Simon’s financial problems to $2 million in gambling losses with betting agencies TAB, Ladbrokes and Mad Bookie.
They are, unfortunately, an impressive set of numbers, but alas it doesn’t stop there!
The court was told that even though the jewellery business was on the brink of collapse, Ben-Simon, his wife and their daughter flew first class to Thailand, Hong Kong, the United Arab Emirates, France, Switzerland and England on a five-week trip. They attended jewellery shows and regularly posted photographs on social media of themselves in opulent hotel rooms, relaxing by the pool or shopping at Dior.
But wait, the story gets better ... as seen on TV!
As a juicy aside, when The Bachelor's Sam Wood proposed to Snezana Markoski with a $50,000 diamond engagement ring from Ben-Simon’s store, neither of them could have known the massive rock still actually belonged to someone else – it was on consignment from a diamond dealer who alleges the stone was never paid for or returned.
“It was a major publicity coup for Mr Ben-Simon, but behind the scenes his business empire was in dire trouble,” The Age reported, adding, “Victoria Police have been asked to investigate the disappearance of the diamonds, while at least one disgruntled creditor has approached an underworld figure to recoup a sizeable debt from Mr Ben-Simon, who claimed to have just 17 cents in his bank account when he declared personal bankruptcy in late July.”
This sorry saga affected many people, and Ben-Simon’s father – who sold the family jewellery business to his son in 2013 – was not happy either.
Eliyahou Ben-Simon filed an affidavit in the Supreme Court saying, "I am bitterly disappointed and embarrassed at the way my son appears to have conducted the business since his company bought it.”
Perhaps Ben-Simon senior might be happy with his son’s award! Or even better, he might be happy that his son has now featured on television himself, albeit on A Current Affair, where he was labelled 'Ronnie The Runner'.
HIT OR MISS? Miss ... as in missing $10 million
Previous winners
2015 - $3,000,000: incredible business turnaround
2014 - Jewellery merger creates world's largest retailer
2013 - Jewellery chain collapses owing $3 million
2012 - Ex Pandora man to launch “clicks and mortar” stores
2011 - Young Jewellers Group
births, deaths & marriages
Births:
Waterford Crystal
Dansk Smykkekunst
Olivia Burton
Deaths:
Time Essentials
Endless Jewelry
Julie Sandlau Australia
18-carat gold Apple Watch
Bensimon Diamonds
Marriages:
Duraflex/Police, Roamer watches, Jag, Les Georgettes
AJ Watch Repairs/Alfex
Divorces:
Expertise Events and JAA
Nationwide Jewellers and JAA
HITS & MISSES ARCHIVE: 2011 - 2015